Last S Korean workers leave joint factory zone

South Korean soldiers set up barricades across the road to the Kaesong Industrial Complex at a military check point in Paju, near the demilitarised zone dividing the two Koreas, in March.

AFP: Jung Yeon-Je

South Korea has withdrawn its last remaining workers from a joint industrial zone in North Korea, which is at risk of permanent closure due to soaring military tensions.

The Kaesong Industrial Zone - built 10 kilometres north of the tense frontier in 2004 - was once a rare symbol of cross-border cooperation, but has fallen victim to the recent stand-off on the Korean Peninsula.

Seoul last week ordered all remaining South Koreans to leave after Pyongyang banned entry by southerners, pulled out all its own 53,000 workers and rejected the South's call for talks on the impasse.

Most South Koreans had left by early Tuesday, and the last seven workers returned Friday after several days of talks with the North over issues such as unpaid wages for North Korean workers, the Unification Ministry said.

Seoul sent two vehicles loaded with cash over the border at the same time as the last workers returned to make the payments demanded by Pyongyang.

Tension has been high since the North, angered by fresh UN sanctions sparked by its nuclear test in February and the South's military drills with the US, issued a series of apocalyptic threats of a nuclear war against Seoul and Washington.

Pyongyang has repeatedly blamed the South for the deadlock over the industrial zone.

"All facts go to prove that the [South Korean] puppet forces are working hard to turn the sacred [industrial zone] into a theatre of confrontation and source of a war against the North, not a zone for reconciliation and unity," the North's official KCNA news agency said in a commentary on Friday.

"The puppet regime is getting frantic in its moves to have the [industrial zone] closed by withdrawing all south side's personnel from it," it added.

Previously the complex had remained largely immune to strains in cross-border relations.

While neither side has gone so far as to declare a permanent shutdown, experts say the next step could be for the South to cut electricity supplies to the site.

South Korean companies with interests at Kaesong have expressed shock at the sudden withdrawal.

The North ignored a plea by South Korean businessmen to visit the joint industrial zone earlier this week for talks on its future.

Established in 2004, Kaesong has been a crucial hard currency source for the impoverished North, through taxes and revenues, and from its cut of worker wages.

The project was born out of the "Sunshine Policy" of inter-Korean conciliation initiated in the late 1990s by South Korean president Kim Dae-Jung.